Abstract
The paper examines corporate finance, focusing on the efficient market hypothesis. The paper further examines the behavioural finance school of thought, which argues that any investment decision is a gamble when investors are not fully aware of the future results of their actions. The paper discusses how, due to human psychology, investors often act irrationally, thereby decreasing the market transparency and predictability, together with decreasing market efficiency. The paper concludes that this increases the importance of recent behavioral finance studies, as capital markets are driven by purely human behavior and thus are subject to huge risks.

Outline:
Introduction
Behavioural Finance Approach to Market Efficiency Theory
Conclusion
References

From the Paper
"Fridson in his work argues that all the investors have their sentiments, or biases when considering risk and making investment decisions. Thus, the risk premium on any asset is the summary of fundamental premium set by efficient investors and of sentiment premium or the investors judgements errors. Also, there are asset prices bubble theories which also prove that in some points of time investors do behave irrationally and overestimate or underestimate factual fundamentals which leads to none fundamental increases in some asset prices followed by further price crash."

Tags:premium, risk, irrational, wealth, probabilities

Abstract
Perhaps the first issue addressed in this paper is a consideration of the possible conflict caused by various governmental regulations on the corporate goal of increasing shareholder wealth is this: Is there any effect? The second question examined-and perhaps the more important one in today's global business and social environment-is this: Is the maximization of shareholder wealth the appropriate goal for a business entity? The paper shows that, indeed, with Europe embracing human rights as a major issue, and in view of the current divisive atmosphere in the United States concerning both corporate governance and governmental transfer payment restructuring (Social Security), it seems advisable to consider these questions from a broad-based global perspective and also from the perspective of other 'stakeholders' in global business besides the shareholder. These stakeholders would include, of course, all citizens of the globe and not merely those with sufficient income to become stakeholders.

Paper Outline:
Introduction
Tavis' Model
Demonstrations from the Shareholder Norm
References

From the Paper
"While that is a normative theory that gives rise to a complex of actions, the stakeholder theory proposed by Tavis "is more of a description of who has a stake in the activities of the firm than a normative theory" (2002 Database). Tavis quotes R. Edward Freeman, who defined stakeholders: "A stakeholder in an organization is (by definition) any group or individual who can affect or is affected by the achievement of the organization's objectives" (2002, Database). This much more inclusive definition makes it clear that unless a corporation is living on a planet of its own, a closed and moreover perfect system of equality of risk, reward, 'collateral damage' and any effect imaginable, then it is incumbent on management of that corporation to consider not merely the shareholders as traditionally defined."

Tags:management, profitability, SEC, Tavis

Abstract
This paper explains that traditional financial thinking relies on assumptions of certainty, complete knowledge and market efficiency and in this context, financial decisions should be relatively straightforward. In the real world though, many times what is observed deviates greatly from what would be expected using traditional financial thinking. This paper therefore uses different game theory models to more accurately explain observed financial decisions dealing with capital structure, corporate acquisitions and initial public offerings (IPOs).

From the Paper
"Game theory has made great strides in explaining many of the observed phenomena falling under corporate finance. One example is the capital structure decided upon by a firm s management. Capital structure deals with the firm s decision to raise funds through debt versus equity and what ratio of debt to equity should the firm maintain. Modigliani and Miller in 1958 showed that in perfect capital markets (i.e. no frictions and symmetric information) and no taxes a firm could not change its total value by altering its debt/equity ratio; thus capital structure is irrelevant. However in the real world, capital structure is carefully thought about by every company, and it is in fact not irrelevant because taxes do exist and capital markets are not perfect."

Tags:acquisitions, application, bondholder, control, debt, debtholder, equity, games, ipo, merger, ratio, shareholder, shield, tax, theory

Abstract
This paper analyzes the article, "Finance and Growth: Schumpeter Might Be Right," written by Robert King and Ross Levine in 1993. The paper discusses globalization's impact in corporate finance in developing countries and discusses the article's view on the subject. It also looks at the content of the article and the validity of its claims and provides an overall review of the article.

Table of Contents:
Introduction
Summary
Analysis/Critical Evaluation
Conclusions

From the Paper
"Globalization's impact in corporate finance in developing countries has thus been enormous, guiding the corporations into the adoptions of new financial and accounting standards, in the increase of their transparency and corporate governance standards, as well as in adopting risk management instruments in order to hedge their commitments on the financial markets. Further more, they are decreasing their financial leverage so as to decrease their debt to equity ratios and develop a more prudent approach. The future participation of corporations in developing countries on international financial markets will most likely increase in trend, as well as in approach."

Tags:developing, governance, stability

Abstract
This paper considers the key factors which affect a multinational company's cost of capital. The paper includes an analysis of various factors including debt and equity funding, risks, interest rates and the overall weighted average cost of capital (WACC).

Outline:
Debt
Equity
Risk
Interest Rates
Alternative Investments

From the Paper
"In a company's capital structure debt is usually one of the major components and consists of long term borrowings such as bank loans and other financial instruments such as bonds and debentures (Arnold 2007). The principal cost of capital with regards to the debt component of the capital structure is the payment of interest upon the capital borrowed in the first instance. In the case of a bond, interest rates are fixed at the issue of point of the bond with the company receiving a lump sum investment on issue in return for regular repayments of a fixed interest rate. On the other hand long term borrowing may have slightly more flexible approach to the cost of capital. The principal cost of long term borrowing is still an interest rate however, the borrower may opt to negotiate a fixed or floating rate of interest. Where a fixed rate of interest is agreed, then the cost of capital is also fixed for the duration and will operate like that of a bond or debenture. However, where the interest rate is a floating one, then the parties will negotiate an initial rate but this will then be amended to reflect changes in the underlying interest rates issued by central banks."

Tags:capital, debt, equity, risks, interest, rates

Abstract
This paper explains that, to use cost/benefit analysis, add up the value of the benefits of a course of action and subtract the associated costs.The author stresses there are times, such as sizing maintenance efforts or dissecting performance issues, when a cost/benefit analysis will not be informative or the right avenue to take for decision-making. The paper stresses that performance modifications may or may not have anything to do with functionality. Example.

From the Paper
"In its simplest form, cost/benefit analysis is applied only with financial costs and financial benefits. For instance, a simple cost/benefit analysis of revamping equipment in a factory would measure the cost of the update and subtract this from the economic benefit of making the changes. However, in a more complex analysis, there are intangibles that must be included such as the personal impact on the individuals who had a slowdown during the revamp and, on the other hand, worker satisfaction with the new approach that increased efficiency and stressed ergonomic factors."

Tags:add, subtract, functionality, intangibles, decision-making

Abstract
This paper uses a fictional scenario to demonstrate how a company, in this case, Intel, should decide from which sources it should obtain the required cash for financing a project. The paper uses Intel's financial statements from 1999 in order to point out the method for determining the relation between new debt and new equity and concludes that the $675 million dollars should be divided into two parts; the company should issue bonds for half the amount and new stock for the other half.

From the Paper
"The second issued that needs to be discussed is the hierarchy of financing. There are researchers who claim that companies follow a financing hierarchy, with retained earnings being the most preferred choice for financing, then followed by debt, while new equity is the least preferred choice. This hierarchy obviously has a rationale. The first reason for which retained earnings are the favorite source of financing is maintaining flexibility. Managers value this characteristic, so they will generally avoid using external financing, which reduces flexibility, and try to use internal financing whenever possible. The second cause of the hierarchy is control. Issuing new equity weakens control, since the structure of the company's shareholders can significantly change, while issuing debt creates bond covenants, which, in turn, lead to changes in the company's management technique."

Tags:retained, earnings, straight, debt, convertible, debt, external, common, equity, straight, preferred, stock, convertible, preferred, stock

Abstract
This paper argues against allowing unlimited corporate financing in elections and focuses on the Supreme Court ruling in favor of Citizen United in 2010 that removed limits on the amount of money that corporations or unions can contribute towards an election. The paper contends that money in elections ruins democracy and takes away the voice of the people, and, the framers of the Constitution did not grant corporations a guarantee of First Amendment rights. The paper refers to the case of the Californian Correctional Peace Officer Association (CCPOA) prison union that has been allowed to become extremely influential in California politics and promote corruption in politics.

From the Paper
"When the Supreme Court voted 5-4 in favor of Citizens United, Justice Stevens wrote a ninety page dissent that zealously attacks the Court's ruling. Part of Justice Steven's argument was based on more than one hundred years of the United States government passing election financing laws in an attempt to prevent corruption, and against corporations and unions having the ability to practice free speech when it comes to spending on elections.
"In his dissent Stevens writes how the U.S. Congress in 1907 passed the Tillman Act that prohibited corporate spending by banning any member of Congress from accepting contributions from a corporation. Justice Stevens writes that President Theodore Roosevelt said in an address to Congress, "All contributions by corporations to any political committee or for any political purpose should be forbidden by law; directors should not be permitted to use stockholders' money for such purposes; and, moreover, a prohibition of this kind would be, as far as it went, an effective method of stopping the evils aimed at corrupt practices acts" (42). Thus, Stevens in quoting Roosevelt on the Tillman Act argues that Congress has tried to regulate corporations and later the growing financial influence of unions from spending on elections because Congress did not want corporate money to influence elections for fear that corporations would have a larger influence on laws affecting corporate practices. The Tillman Act also prevented corporations from giving money to a political candidate to run against a member of Congress who had a voting record not aligned with corporate interests."

Tags:Citizen, United, democracy, corruption, free, speech

Abstract
This paper discusses the advantages and disadvantages of the use of the sinking fund in corporate bonds from the viewpoint of the corporation and the bondholders. This paper also discusses the advantages and disadvantages of the call provision from the viewpoint of the corporation as well as its bondholders. These elements carry heavy weight when considering expansion into an international market. The corporation's current status and ratings play a big role in what kind of financing is available and what kind of future debt will be acquired. Key members of management must keep all areas of performance in mind when formulating a strategy for entry. With this in mind, the paper also analyzes factors that effect performance such as bonds yield to maturity. The writer explores the issue of risk as a constant factor evident in business. It can be seen as both a positive and a negative. Risk affects all facets of the corporation, not only the foreign subsidiary but also company performance. It is therefore important to include a risk assessment as a part of any global strategy.
Introduction
Role of Debt Over Equity
The Sinking Fund
The Call Provision
Factors Effecting Yield to Maturity
Factors Effecting Risk
Conclusion

From the Paper
"The role of debt over equity is important to consider as a company expands, as it is a true indicator of how the company will succeed. It describes how the company manages its money in its balance sheets. It refers to money the company owes and does not expect to pay off within the next year. In business, there are long term and short term debts. These debts are categorized by how lengthy a repay period there is with the creditor. A good sign that the company is succeeding is when the equity outweighs the debt or that the debt is getting smaller over time. This indicates a certain amount of health within the organizational structure. However, companies with more long-term debt than short-term debt find themselves in trouble because they must continue to pay interest payments and risk having little working capital. It is important a company pay close attention upfront when borrowing money and note the interest rate of the loans as some fall privy to market fluctuation. Long-term debt is more volatile as interest rates can be influenced by economic changes. It is important to analyze how a new international location is doing before committing to entry there. Still interest rates plays a dramatic role in how banks rate a company the ability to pay on time. In this way it benefits the banks more as they are able to "spur innovation to extract return for investors via new structures, some involving high leverage" ("The Financial Stability Conjuncture and Outlook" 51). Debt always works to benefit the banks in this way."

Tags:bonds, sinking, funds, corporate, bonds, market, international

Abstract
The paper examines conflicts that arise when various types of regulations (environmental, human resources, financial) are imposed on business entities, creating difficulties in maximizing shareholder wealth.

From the Paper
"Corporate Finance:
Regulations, Ethical Behavior and Shareholder Value

The purpose of this essay is to examine the conflicts that can arise when various types of governmental regulations (e.g., environmental, human resources, and financial) are imposed ..."